Economic Experts identify Path to African Growth

Economic experts within and outside Africa have identified provision of infrastructure, education, industrialization, diversification of the economy and foreign investment as opposed to portfolio investment among others, as factors necessary for sustainable and inclusive African growth.

The experts from various sectors of the economy formed the panel of discussants at the just concluded 1st Covenant University International Conference on African Development Issues (CU-ICADI).

The two-day conference which held on the University campus between May 5 and 6, 2014, focused on Rising Opportunities for Investors in Africa and the Prospect of an Economic Miracle.

Their position was the out come of the robust discussion of a paper presented by the Keynote Speaker, Professor Thomas Sargent.

Professor Sargent, a Nobel Prize winner in Economic Sciences in 2011 and currently a Professor of Economics at New York University had noted that government, through expert advice, should put plans in place for economic growth.

The Nobel Laureate in his paper titled Bound Together: Two Competing Visions submitted that despite the opposing ideas of planning and unfettered market, the two are bound together and are inseparable.

Professor Sargent also argued that resources (people, land, water, air) should be combined to produce goods which are to be distributed among different people,“From each according to his ability,to each according to his need”.

In her submission, the Acting Governor, Central Bank of Nigeria, Dr Sarah Alade, said though the nation and the Continent seemed to have done the right things economically, “But we have not been able to have that kind of inclusive growth to create the kind of continent of our dream”.

Dr. Alade decried the high rate of unemployment compared to other places and disappointing standard of living in terms of welfare for the people.

“The engine of growth must be the private sector but we never seem to have anybody in the driver’s seat because a lot of what government should be doing are not done”, the Acting Governor explained.

The Deputy Dean, School of Business, Covenant University, Professor Kenneth Adeyemi, corroborated the position of the Acting Governor of CBN. He noted that, though the Continent was said to be growing at a fast rate, this has not translated into the much expected economic rebirth.

“The Continent still exhibits high unemployment, high dependence on commodity export and very little value addition. What we need in Africa, taking Nigeria as an example, is for government to play its part by providing the necessary basic infrastructure”, he argued.

The way forward, according to Professor Adeyemi, is that the Continent must avoid what he called “growth without development, or jobless growth” saying “there is no point growing and having a lot of jobless youths”

Dr. Jonathan Aremu of the ECOWAS Common Investment Market, in his paper titled “Transforming Africa towards Sustainable and Inclusive Growth”, submitted that agriculture must be developed beyond crude implements.

“To pursue sustainable growth, we have to modernize agriculture beyond the use of crude implements because this is what engages majority of the populace”. He also called for an improved investment climate within the African economic environment.

In his own contribution, the Director General, Budget Office, Nigeria, Dr. Bright Okogu, explained that education and job creation are necessary conditions to have inclusive growth. “Growth is not inclusive enough because when you don’t have jobs, there is no point being told that you have 510 billion GDP. That in itself amounts to One Hundred percent nothing.

“It is not that jobs are not being created, they are not being created fast enough. 1.6 million jobs were created last year whereas we have 1.8 million new entrants into the Nigerian labour force annually. This means we are adding more into the pool of unemployment”, he explained.

Dr Okogu advised that various levels of the economy, private or public and individuals should join hands with the government in order to achieve a more inclusive growth for everyone.

An Economics Professor at the University of Wisconsin-Platteville, USA, Professor John Ifediora, argued that Nigeria and Africa in general are doing well but are over dependent on single source of income, which are usually natural resources like oil and mineral resources, such sources can not engender economic growth.

Professor Ifediora noted that the only way to sustainable development is through industrialization. He argued that it is savings from profits that drive growth and not savings from salaries. He also explained that “What matters when it comes to development are institutions such as legal, economic and political institutions because they define what we engage in.”

Professor Ifediora added that though African nations now have independence, the lasting effects of colonial era are still affecting the continents till date.

Another member of the panel of discussants and a Professor of Economics at the London School of Economics, Professor Jonathan Leape, speaking on “Ideas for Growth”, explained that there are no recipes for fast growth, there are only ingredients, one of which was an unprecedented opportunity to bring research into policy to promote growth.

Professor Leape enumerated four key factors that would drive growth and development in Africa to include the effectiveness of the state, the driver of productivity, functioning cities, and energy (power supply).

The CU-ICADI is expected to be an annual event where experts will converge to chart a way for Africa development.